Offering long-term payment plans to meet the financial needs of patients

As healthcare payment liability continues to shift to patients, it has become increasingly important for healthcare organizations to offer convenient and accessible patient payment options. Prior to COVID-19, the exponential growth of high deductible health plans along with rising consumerism drove the need for more flexible payment vehicles. While those drivers are still valid, the current public health crisis has made payment programs even more essential. The cost of treating the virus is significant, and rising unemployment means more people are coming to the hospital without insurance.

A key component in a patient-centered payment experience is a patient lending program, which allows patients to spread payments over time with little to no interest. These types of programs empower patients to meet their responsibilities while respecting the burden the obligations represent. A well-administered payment plan can also foster a lasting relationship with patients because individuals may prioritize seeking care in a facility that makes it easier to pay. This keeps patients in network, which is not only financially lucrative for health systems but also enables value-based care models.

The challenge with payment plans is that healthcare organizations aren’t usually set up to administer them effectively, especially over extended periods. If a hospital offers payment plans, they may do so on an ad hoc basis. This leaves the hospital with an assortment of arrangements that aren’t necessarily standardized and are often hard to manage. As patients seek payment arrangements for higher dollar amounts with longer terms, healthcare organizations are seeing the need to rethink their approach.

Pursuing a better option

Community Health Network, a large integrated health system located in Indianapolis, Indiana, saw the value of retooling its patient payment plans. “Although we’ve offered plans for a while, our approach wasn’t standardized, we struggled to accommodate longer terms and we had to offer separate plans for different service areas because of technology constraints,” said Chad Bills, network vice president, revenue cycle for Community Health Network. “We wanted a way to consolidate different payment plans, transfer the liability outside the hospital and improve the convenience and accessibility for our patients.”

Community Health Network turned to CommerceHealthcare^® for answers. “We’ve had a patient finance program since 2014, and we are constantly refining it to give greater peace of mind to patients and providers,” said Mark Huebner, director of healthcare financing for CommerceHealthcare^®. “Through our program, the patient has access to a line of credit with low or no interest, giving them a way to make smaller payments over time. This mirrors the ease and accessibility of a hospital payment plan with everyone being approved regardless of credit. There is also no paperwork because the provider already has the patient’s information in the electronic health record.”

CommerceHealthcare^® offered Community Health Network tiered options, so the health system could select the one that would best serve its patients. “We chose a program that spans multiple service areas and allows patients to consolidate existing payment plans into one, adding new expenses onto the same line,” Bills said. “This way no matter where they receive services in our organization, they can add their payment responsibilities to the credit line.” The program focuses on longer term payment plans, spreading across 24, 36 and even 60 months.

Not only does the relationship with CommerceHealthcare^® help patients, it benefits the health system as well. “We pay the hospital upfront when we assume existing payment plans, patients add to those plans or a patient opens a new line,” Huebner said. “We then work directly with the patient to collect on the line. This accelerates cash flow for the health system and improves liquidity while reducing A/R days and bad debt expense — which ultimately strengthens operating margins.”

Hospital staff can also get patients set up on a payment plan remotely. Credit line applications can be done over the phone or online, with the patient verbally agreeing to the line of credit. The process is touchless, which is important during the current public health crisis when staff are working from home. 

The advantages of working with a bank

In many cases, payment plans with CommerceHealthcare^® perform better than a hospital’s in-house payment plan. “Since we are a bank, and consumers are more comfortable and familiar with dealing with banks when it comes to their finances, we have found they are more likely to pay their healthcare bills when they come from us,” Huebner said. “They also know that we will follow up on any delayed payments, so it is more likely that payment becomes part of their routine.”

If a patient misses a payment, CommerceHealthcare^® sends reminders and late notices. “We’ll work the account for 90 days,” Huebner said. “Once we’ve exhausted all efforts to collect from the patient, we give the debt back to the hospital to handle through their bad debt collections process. Note that if we can’t collect from the patient, we give back our fee. This means we assume risk to administer the program, which fosters a better relationship with our healthcare clients because we have a financial stake in collecting from patients.”

Having a bank administer the lines of credit is also helpful during a crisis. Throughout the pandemic, for example, CommerceHealthcare^® activated its debt relief policy to help patients who were struggling. “They served as a true partner to us in this area, sharing our values and the values of our patients,” Bills said. “They allowed payment deferrals and extended the delinquent timeline to support people through the crisis.”

A straightforward and well-supported implementation

As Community Health Network began implementing the patient financing program from CommerceHealthcare^®, the bank helped the health system cultivate buy-in. “They provided in-person training and curriculum for our client services and cash posting teams, which are the staff who are most involved in payment plan enrollment and payment posting,” Bills said. “The bank also created content for a roadshow to present to key health system executives across the network, explaining the bank’s unique advantages. Another benefit was they partnered with us to create call scripts, so that any patient interactions were in line with our values and goals.”

Since implementing the program, Community Health Network has seen meaningful results. “We were able to expand our patient payment choices and consolidate payment plans while increasing cash on hand for the network,” Bills said. “We’ve also received a lot of positive feedback from patients as they express gratitude for the longer payment plan lengths. We are exploring the bank’s pre-service collections program because we feel the ability to use the same vendor for pre- and post-service will be helpful in ensuring consistency for our patients.”

A continuously evolving effort

Looking ahead, CommerceHealthcare^® is working to enrich the online aspects of its patient payment program. “We’re working with providers to implement self-service online access,” Huebner said. “This allows patients to see their bills online and then choose the line of credit to finance them without having to talk to someone at the hospital about setting up a payment plan. Many hospitals are implementing technology that lets patients see what they owe online and determine how they want to pay with a menu of payment options. Making our line of credit another selection on the menu will further enable patient choice and convenience.”

CommerceHealthcare^® is also retooling its technology to align with price estimates. “Generating a reliable estimate has traditionally been challenging in healthcare, and sometimes the estimates are not accurate,” Huebner said. “We have built our technology so providers can manage price estimates on the back end. Once insurance adjudicates, if there are changes to what the patient owes, the provider can adjust the patient’s line of credit. There are no penalties for making these changes. This gives providers the freedom to make adjustments and peace of mind knowing they can tweak the lines to match actual costs without penalty. Over time, we hope to refine the patient estimate portion of the offering as the ability to accurately estimate care costs improves.”

About CommerceHealthcare

A comprehensive patient lending program is a key element in a patient payment portfolio. CommerceHealthcare^® offers robust payment plans that ensure healthcare providers can meet patient needs, optimize staff time, increase margin and reduce financial risk. CommerceHealthcare^® solutions are provided by Commerce Bank.